Chapter 7 - Responsibility or Function (1986)


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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         May, 1986


          (Source:  Co-operative Principles, Today & 
               Tomorrow by W.P. Watkins, pp.109-122)
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                          Chapter Seven

                    Responsibility or Function
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The discussion of Liberty in the preceding chapter terminated in
the affirmation that in the co-operative movement and, for that
matter, society at large, true freedom is to a greater or lesser
degree tempered by the necessity of organisation and the
effective performance of functions. That implies that the concept
of Function is inherent in co-operation and its importance, its
indispensability even, is recognisable by its influence on the
application of the other Principles as the planets of the solar
system influence one another's orbits. It will be remembered that
the existence of Neptune was discovered not by the telescope, but
by the fact that its influence on the movement of other planets
could not be explained in any other way. The fact that Function
was not considered by either the ICA's Principles Committee of
the 1930s nor the ICA Principles Commission of the 1960s is no
reason for not discussing it in the 1980s. Liberty cannot be
rightly enjoyed or exercised without Responsibility, which must
therefore be given its place among the Principles of Co-
operation.

The sixth Principle is denoted by alternative terms
Responsibility or Function, because these terms stand for two
distinct but complementary aspects of one concept. That which is
Function when viewed from the standpoint of society is
Responsibility when viewed from the standpoint of the individual.
The traditional co-operative watchword `Each for all and all for
each' signifies more than just community, or mutuality of
interest. It implies not merely attitudes but action. In the
classic account of the `spirit' of Co-operation given by Dr.
William King in No.7 of his Co-operator, the moral basis of the
individual co-operator's responsibility is clearly indicated.
`When a man enters a co-operative society, he enters upon a new
relation with his fellow-men' wrote Dr. King. Friendship and
comradeship, in his view, should not remain on the plane of
vaguely diffused sentiment nor left to grow by chance or
accident. They became`a paramount duty and obligation' which
should be enforced by every sanction a co-operative community
could bring to bear. Human societies, co-operative or other, if
they are to live, survive and achieve their purpose, have no
choice but to organise themselves or be organised. This means
something more than merely economic division of labour, although
that is, of course, included. The society forms out of its own
substance - the men and women who compose its membership -
special groups to render particular services, not for their own
benefit alone, but for that of all other members, that is, for
the well being of the society as a whole. Any given service will
illustrate the way in which `all' take care of the interests of
`each' through enlisting `each' to minister to the interests of
`all'. A co-operative society serves its members by performing
functions in their interests, but it cannot do so effectively or
even at all unless they in turn faithfully fulfil their
responsibilities towards it.

The men of Rochdale, when they inscribed in their `Law First' the
phrase `to arrange the powers of production, distribution,
education and government,' were naming the vital functions which
would have to be discharged in their ideal community when they
came to establish it. The functions would not be discharged
simply in the community, but on the community's authority, in its
name, for its purposes, not for the sake of individual profit,
ambition or aggrandizement. The Pioneers did not share the
unfounded optimism of those economists or moral philosophers of
an earlier generation who taught that through some pre-ordained
harmony, the interests of the community would be best served by
the unrestricted pursuit of individual interests. Their
experience as workers and consumers had taught them other
lessons. They did not deny, nor would they diminish, a man's or
woman's responsibility for himself or herself, otherwise they
would not have been such ardent propagators of self-help; but
they believed that a proper sense of Responsibility, when
enlightened, would lead men and women to organise themselves for
combined action to achieve collective well being. There is no
reason to think that the Pioneers would not apply, in the society
they actually founded, the functionalism they intended to adopt
in the community into which, they hoped, the society would grow.

The fundamental role of the functional idea in Co-operative
economic and social organisation is more clearly seen if we
contrast it with the non-Co-operative business world. Dr. Georges
Fauquet and many after him have distinguished the two elements
which are combined in a Co-operative society: the association of
persons and the enterprise which serves their common needs. In
fact they are to be distinguished the two elements which are
combined in a Co-operative society: the association of persons
and the enterprise which serves their common needs. In fact they
are to be distinguished only by abstract thought; there is no
necessary physical separation. They are united by the fact that
the association of persons is the entrepreneur. The
entrepreneur's functions, as we observed in the chapter on
Democracy, inhere in it. So far as individuals in a co-operative
society exercise entrepreneurial authority or discharge
entrepreneurial functions, they do so as elected officers, paid
servants or agents of the association. The self-appointed and
self-responsible entrepreneurs - characteristic of capitalistic
economic organisation, whether an individual or a group and
governed by what the social philosopher Thomas Carlyle called the
`cash nexus' or connection between entrepreneur and shareholder,
or between employer and worker - are foreign to co-operative
economy. The common saying that companies are associations of
capital, while co-operatives are associations of persons, is
driving at the same point: not that there are no, or should not
be, monetary relations in co-operative economic organisations -
there obviously are and must be - but the cash nexus is not the
sole or principal bond between individuals or groups performing
specialised functions. The vital bond is constituted by the
concept of membership.

The language we employ in discussing these questions and the
metaphors involved in the terms we use are significant and not
to be ignored, for they point to deep and far-reaching
resemblances. The people who join co-operative societies and
collectively assume responsibility for them are called members.
They have relations with their societies as shareholders or
customers because such functions as the contribution of capital,
buying, selling, borrowing or depositing all spring from the fact
that they are members, parts of one body. The word `member',
derived from the Latin word for a limb, cannot signify anything
other than a part of a larger whole. The term carries
implications of mutual dependence - of the whole body on the limb
and of the limb on the whole body. The fable of Aesop, the
moralist, of the belly and the members shows how deeply the idea
of function is embedded in the wisdom of our ancestors. It also
illustrates how liable specialists can be to form mistaken
judgements, if their vision of the whole system they serve is not
adequate to correct them! Similarly with the term `organisation',
which it is completely impossible to avoid using in this context.
The word `organ' in the original Greed denoted an instrument. By
analogy it was applied to specialised parts of the body, e.g. the
eye as the organ of sight, and thence transferred by a second
analogy to human society. Just as the physical body breathes,
nourishes itself and moves from place to place by adapting and
locating particular sorts of cells to serve as constituents of
organs, so the body social selects, trains and locates its
members for specialised duties fulfilling its various purposes.
It would be, of course, a mistake to press this analogy too far.
The lift of societies and physical organisms is by no means in
every respect similar, but the association of life everywhere
with organisation is a warning against too mechanistic a
conception of co-operative structures.

The fundamental role of organisation in modern society was
probably first fully appreciated by Saint-Simon and his school.
Saint-Simon himself brought out in 1819 a short-lived review
which he called significantly L'Organisateur. His purpose was to
induce his countrymen to direct their thinking more towards the
social structure into which their nation was evolving than
towards the past or present out of which it must evolve. Into the
controversy which raged among French intellectuals 150 years ago,
mainly between the liberals, who favoured political democracy and
free competition in economics, and the traditionalists who harked
back to the feudal and hierarchical regime prevailing before
1789, Saint-Simon injected a third element, the idea of
constructing a new order. In his reading of history, feudal
society, which had been dominated by the warrior in things
temporal and the priest in things spiritual, had broken down into
a transitional system dominated by jurists and meta-physicians;
their tasks were largely destructive and they were preparing the
way for a new order under which leadership would pass to the
scientist and the industrial organiser.

Saint-Simon was obviously much more of an intuitive than a
systematic thinker. It was his disciples, working upon his
fragmentary ideas and suggestions, who later gave definition and
coherence to those which had positive value. In particular, they
sharpened the opposition between the social principle of
antagonism (competition) and association. They rejected the
individualism of classical economic theory and its corollary of
free enterprise. They denied that the liberty and rights of the
individual can serve as basis for any true social order. The
constructive principle was rather association, spreading from the
family to the community, from the community to the nation, and
from the nation to the confederation of nations. This should be
the animating spirit of the society of the future. In the economy
of private enterprise the industrialists exploits the labour of
the proletariat which, while nominally free, has no choice but
to accept his conditions or starve.

This led the Saint-Simonians inevitably to advocate the abolition
of private property in the instruments of production and the
transfer of the right of inheritance from the individual to the
State. The instruments of production being socially owned, they
could be entrusted for industrial operations to approved
associations of social groups directed by chosen functionaries.
The Saint-Simonians were not democrats, for they associated
democracy with the rule of lawyers and metaphysicians which was
destined to pass away. On the other hand they strongly defended
the claims of ability and merit against the privileges of wealth.
Their social concept is one of a hierarchy in which individuals
would be assigned places according to their various capacities
and rewarded according to their performance. What is important
for our present discussion, however, is that the Saint-Simonians
set up, over against what the British economist, R.H. Tawhney a
century later called the `acquisitive society', a society based
on the idea of Function - an idea common to all the Socialistic
schools which have succeeded them, including co-operation.

In so doing, the Saint-Simonians seem to have returned to an old,
rather than to have discovered a new idea. It was an idea which
appeared to have vanished, at least temporarily, from current
thinking on social problems, in the last quarter of the 18th
century, when the idea of society itself seemed to be eclipsed
by all-conquering individualism and the cash nexus had achieved
predominance among human relations. The liberal explosion,
detonated by rousseau's Social Contract and Adam Smith's
exposition of `the obvious and simple system of natural liberty'
(as he called it), and reverberating round Europe in the wars of
the French Revolution and the spread of the Industrial Revolution
from Great Britain to the Continent, may well have been necessary
and in the end inevitable, because the crumbling ruins of
feudalism had outstayed their time and were blocking the advance
of mankind into a new age.

The rise and decline of feudalism occupied a thousand years of
European history and, in the corrupt and oppressive institutions
which the French and succeeding revolutions abolished, it was
scarcely possible to distinguish any more the fundamental
principles which inspired it. Although their application was
never anywhere or at any time uniform, these principles gave
feudal society order and cohesion. In the feudal system,
individuals, communities and `estates' were held together by
mutual obligations of loyalty, service and protection. The
villeins who cultivated the soil were not slaves. In return for
the services they rendered to the lord of the manor, the villein
and his fellows had their rights against the lord, and the lord,
if he could command their obedience in many things, had duties
to fulfil towards them. Often much depended on the existence of
a strong central government and its power to ensure that statute
law and manorial custom were respected, but the position of the
villein was diametrically opposite to that of the mid-19th
century proletarian. The latter, if theoretically free to work
whenever he could find employment, had no general right to work
or claim to a living and was excluded from the parliamentary
franchise if he owned no fixed property. The proletarian lived
by the purchasing power of his wages and when wages ceased and
his meagre savings were exhausted, he and his family starved,
even in the midst of abundance. If the villein starved, it was
because the whole major served together through failure of its
crops or the ravages of war or the plague.

The feudal system was eroded by the development of markets and
the increasing use of money to commute services. Still more was
the system corrupted by the separation of duties from rights, for
the rich and powerful could find ways of enforcing their rights
while exempting themselves from their duties, whereas the poor
and weak could offer little resistance when their duties and
levies were increased or their rights were rendered null and
void. But rights not justified by corresponding duties become
mere privileges and duties enforced on those without rights
become servitude. Such an affront to natural justice was doomed
to destruction in the name of Liberty, Equality and Fraternity.
Unfortunately, revolution when it came left little standing
between the State with its sovereignty, on the one hand, and the
individual with his rights on the other. And Association was one
of the rights which he was denied for a generation or longer. It
was left for the Saint-Simonians to dig out Association from the
debris of the Revolution and set it once more on its rightful
pedestal and, with it, the idea of Function.

The Saint-Simonians, however, remained a small, obscure and
somewhat eccentric sect whose immediate influence on public
opinion and the general course of events was very slight indeed.
The idea of Function therefore remained in eclipse for some time.
Its reappearance and rehabilitation resulted from the
impossibility, as modern industrial society evolved, of doing
without. Meanwhile, irresponsibility reigned in the private and
capitalist sectors of economic life and even today the nature of
Responsibility can often be illustrated more clearly from its
breach than from its observance.

Dominant in social evolution since the beginning of the 19th
century has been the unending succession of new scientific
discoveries and technical innovations which open prospects of
enrichment to the capitalist entrepreneur. He finds his
justification in orthodox economic doctrine, even though that is
not so involved as it once was with the fiction of economic man
and the individualistic fallacy. Since the advent to power of the
bourgeoisie, the claims of wealth upon society have become no
less onerous than the claims of birth which they superseded,
while the duties acknowledged by or demanded of wealth were,
certainly at first, too few and too tenderly enforced, lest
`enterprise' (a gloss upon acquisitiveness) be discouraged. From
the middle of the 19th century, however, the pendulum began to
swing slowly back. The emergence of working class movements, more
or less inspired by socialistic ideas, and the awakening of the
social conscience, shocked by the sub-human living and working
conditions imposed upon wage-earners, combined to compel
governments to impose more and more responsibility upon
entrepreneurs for the health, safety and general new type of
entrepreneur appeared in the form of co-operatives, formed by
consumers and producers to defend themselves against
exploitation; municipalities, organising services in the public
interest;  and the State, desirous of keeping natural or
technical monopolies under social control.

Nevertheless the evolution of private and capitalist economic
organisation proceeded generally on lines which the Saint-
Simonians had forecast. The economic system's insatiable appetite
for capital obliged entrepreneurs to resort to Association
through the company form of organisation which came in the end
to dominate the whole scene. As the typical enterprise grew in
scale its governing structure inevitably tended to become
hierarchical and, as companies amalgamated or combined in other
ways to form cartels, trusts and widely-ramifying concerns, these
hierarchies became increasingly self-maintaining, remote and in
practice exempt from the control of the shareholders to whom they
were nominally answerable, and still more of the community at
large or of government as its representative. Relations became
mostly impersonal. There was and is normally no moral or social
bond between company and shareholders whose interests are purely
monetary. Attracted in the first place by prospects of gain in
the form of income from company profits or the appreciation of
capital values, the latter can at any time sell their shares and
invest the proceeds elsewhere, if the prospects appear better.
Anonymous and fluctuating in its composition, the typical company
is not body capable of either exacting or bearing social
Responsibility.

So far as the employees of companies are concerned, although
public authorities may be able to enforce Responsibilities on
companies for their workers, they cannot impose responsibility
to them. Irresponsible enterprise inevitably gave rise to
irresponsible trade unionism, for the workers would neither feel
nor shoulder Responsibility for a system which demanded obedience
from them while denying them a voice in policy or administration.
If labour be treated simply as a commodity, then the workers'
interest is limited to their bargaining power and what it can
secure for them in the shape of rising wages, the security of
their jobs, the comfort and safety of their working environment
and the extension of their leisure. Nor does irresponsibility
necessarily diminish with the improvement of working conditions
and living discipline. Workers no less than employers can yield
to the temptation to abuse power even against the advice and
warnings of their union officials. The advent of full-time
employment and the so-called Welfare State were accompanied in
more than one country by an inclination to tools without notice
on trivial pretexts, to attempt to predetermine the results of
negotiation by resort to strike action or threat of it, and to
exploit key positions in industrial organisations in order to
extort favourable terms, regardless of the damage and loss
inflicted on the industry or the community by refusing to work
or negotiate. Nor is there any reason to believe that the immense
majority of wage-earners are anything but content with a system
under which they can at once repudiate Responsibility and
increase their income.

The foregoing statement has been, for the sake of brevity, over-
simplified. It is not contended that no sense of social
Responsibility exists among entrepreneurs or workers of various
grades. As a rule there is Responsibility enough to ensure the
fulfilment of contracts, agreements and undertakings; without
moral standards generally observed, the economic system would
collapse. The point is rather that where obligation stems, not
from status, but from contracts, power, and in which the main
motive is commercial profit, gain by investment or, at least, the
avoidance of financial loss, social obligation is liable to be
thrust into second place or even lower in the scale of values.
It is not denied that there have been examples of entrepreneurs
capable of rising above self-interest and keeping constantly
aware of the services they and their undertakings should render
to the community, just as there have always been workers by hand
or brain whose sense of solidarity and obligation reached far
beyond their fellow-trade unionists, their occupation or the
working classes in the mass. But they are rather exceptional than
typical. In a society in which the desire to make money is
regarded as laudable ambition, and the possession of a large
fortune a title to respect, people's minds are bound to be
confused as to the purpose of economic activity in relation to
social well-being and to regard it as an end rather than a means.

This confusion exists notwithstanding the gradual but
irresistible abandonment of laisser faire over the last century.
In contemporary mixed economies there is continual tension
between the economic and the social, largely because social
responsibilities have had to be imposed on industry and commerce
from without. This is to be seen, for example, in the welfare
legislation to which enterprise has to conform for the benefit
of the workers; the company legislation which penalises promoters
or administrators who defraud the public; the measures for
protecting consumers against adulteration and other malpractice;
and the constant attempts to prevent or break up socially
dangerous concentrations of economic power. Yet the normal and
natural evolution of the economic system, even under capitalist
leadership, tends constantly in the direction of closer and more
complex integration, not simply between similar or mutually
complementary enterprises, but also between industry and industry
(witness the growing dependence of agriculture on the chemical,
machinery and petroleum industries) and between national
economies (witness the attempts to free trade areas). The
complexity of the resulting problems and the massive capital
resources committed make accurate, long-term forecasting and
planning indispensable and, with them, ever closer consultation
and interdependence between business enterprise and governments.
Under these conditions, enterprise may become in some ways more
responsible; it may equally acquire a more powerful influence
over governments and their economic policies. It becomes ever
more difficult to determine who governs whom. At least it may be
confidently affirmed that the economic world has progressed
considerably since the days when the right of individual or
capitalist enterprise to initiate and economic enterprise for
profit went unquestioned. The idea of Function haunts
contemporary economy. Capitalists with a conscience seek to
justify their activity and render homage to virtue by claiming
that they are performing services for the community, even though
they are working for profits. This, however, is not a functional
system as a co-operator would understand it, if only because the
capitalist entrepreneur would not be accountable to the proper
authority.

A model co-operative functional structure was outlined in a
masterly paper by The Braun, President of the French National
Federation of Mutual Credit, presented to the Third International
Conference on Co-operative Thrift and Credit held in London in
1974. Dealing with structure, coordination and power, Braun took
for granted that the basic units of a co-operative system are
autonomous. In them the four centres of responsibility (and
therefore power) are the membership, the elected administration,
the management and the employees. The running of the co-operative
depends upon the proper functioning between these four elements
and the relations between them. The danger to be guarded against
is the shifting of the power of decision from the administration
to the technicians. Much, therefore, depends on the ability and
training of administrators.

The elected administrators are most likely to have received no
training at all before their election and not much after it, but
will have `picked up' what they know and what skills they may
ultimately develop by imitating their senior colleagues. The
unanswered question most of the time is, who is to give training?
And possibly also, who is train the trainers? One of the
advantages of the former German system of local and district
committees was that there was always a reserve of partly-trained
personnel graduating from shop and district committees to the
supervisory council of the society on which to draw. But in Great
Britain, where the attendance at meetings tends to diminish the
larger the societies become, there is no such reserve and the
calibre of the average committee person steadily declines.

This is the danger point described by The Braun, when the
manager, who has had training, wants a decision from the elected
administrators which they may refuse or at least hesitate to
give. With less foresight than the manager, they may not be able
to see the consequences of their decision or indecision. Either
the manager leaves the matter undecided and the society suffers
because of a decision not taken, or he may persuade the committee
to leave the matter in his hands and in effect usurp the
committee's functions, thus impairing the society's democracy.
In many matters the elected committees must trust the appointed
official. The object of training the committee is that it shall
know when it should trust him and when it should trust its own
judgement and be right each time.

There is no danger of a similar kind when the primary units are
federated in a secondary organisation. A shift of undue power to
the federation must be obviated by maintaining mutual confidence
and helpfulness. The federal structure develops vertically by the
establishment of a tertiary organisation, a confederation, whose
function is to ensure the Movement's cohesion by defining its
common objects and securing the right subsequent action, besides
its representation before governmental and other external
organisations. Within the confederation,t he specialisation of
functions creates social centres of responsibility each with its
delegated powers, requiring constant efforts to strike a balance
and come to terms with one another in order to maximise the
efficiency and effectiveness of the whole.

The Braun maintained that co-operative organisations demand such
an `institutional' framework, not a `contractual' system with
such devices as exchange of shareholdings and interlocking
directorates as in the ordinary business world. In other words,
in a co-operative system the autonomous elements respect each
other's powers and responsibilities and become inter-dependent
through inter-co-operation. Within the confederation there is a
continual dialogue which reconciles differences and establishes
a collective discipline based on a global concept of the whole.
In such a structure, the Principle of Function complements both
Liberty and Democracy.

In the centrally planned and directed economies of totalitarian
states under one-party rule, in theory at least, economic
organisation and activity are recognised as social functions
initiated and led by officers appointed by duly constituted
authorities. But here the question may legitimately be posed,
whether such a system is not a functionalism imposed upon the
economic organisation in order to ensure its subservience to
political ends, rather than a functionalism built into the
economic organisation to make it responsive to social needs. But
once again it would not correspond to the Co-operative idea of
Function because it is in general not associated with Democracy,
Equity or Liberty.

For the essence of Co-operation consists in membership of a free
association and willing acceptance and discharge of the
obligations, statutory and moral, which membership entails. So
far as it has developed, it exemplifies the character of an
economic system based on functionalism. The Principle of
Function, like the six others, pervades the whole Co-operative
Structure. The meaning of Dr. Fauquet's epithet `Responsables et
Solidaires' is that each co-operator, while answering for himself
and his own welfare, is conscious of his trusteeship for the
interest of his fellow-members. This trusteeship includes loyal
support of the society's economic action and also faithful
discharge of all the functions of membership, because it is under
these conditions alone that the society can maximise its economic
power and benefits. Conversely, disloyalty and neglect of a
member's duties are breaches of trusteeship, as they tend to
weaken the society and in the end to damage the interests, not
of the disloyal alone, but of all the rest. Moreover, though a
co-operator may feel a sentiment of loyalty primarily to his
society, his obligations do not end there. He and his fellow-
members of the society owe a collective loyalty and have
collective functions to discharge towards any federation to which
they society affiliates and therefore on as far as co-operative
solidarity may extend - even to the very limits of the
international co-operative movement. The Principle of
Responsibility or Function is not one for office-bearers only.
the rule of `Each for all, and All for Each' signifies that co-
operators everywhere are responsible both for and to one another.